Do or Die:

We spoke about the uncanny ability for energy, via the XLE, to either CLOSE out a year as the best or worst major S&P sector performer out of 11 in our last note on the group here and as we enter the second half of 2024 it is the third best performer up better than 10% so it has a good chance to finish strong this year. Last week the XLE recorded its first back-to-back WEEKLY gains since an 8-week win streak between mid-February and early April. Notice the week prior found support at the rising 50 WEEK SMA following the break above the cup base pivot of 90.75 from mid-March, often an ideal entry point (notice how the very round 90 number was a thorn in its side last September and October with 4 weeks during the time-period above 90 intraweek but zero CLOSING above the figure and all reversing to finish with an 86 or 87 handle). Consider that very round 90 number a line in the sand and a MUST for it to conclude this coming week above it. Below is the daily chart of the XLE, and it found a bounce off the 200-day SMA in mid-June and this could be ready for a move toward par in Q3. Last week it rose 2.4% making it easily the best major S&P sector performer. As we enter July it begins a boring 3-month seasonality period the last 4 years so perhaps many are not expecting much from the space and it can give a crude awakening to the upside, pun intended.

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